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5 hours ago
- Business
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Marvell Shares Tumble Amid Concerns Over Next-Gen AI Ramp
May 30 - Shares of Marvell Technology (NASDAQ:MRVL) slid 4% in premarket trading Friday after the company posted first-quarter results and updated its guidance. The specialty semiconductor firm reported a GAAP gross margin of 50.3% and a non-GAAP gross margin of 59.8%. GAAP diluted EPS came in at $0.20, with non-GAAP diluted EPS of $0.62. Cash flow from operations was $332.9 million, bolstered by its positioning in the custom AI infrastructure market, which may drive further growth. Warning! GuruFocus has detected 4 Warning Signs with MRVL. Bank of America analyst Vivek Arya, who rates the stock Buy with a $72 target, said confirmation of Marvell's pipeline ahead of its June 17 AI Investor Event could boost confidence. However, limited earnings revisions are likely to keep the shares in check near term, as the Microsoft (NASDAQ:MSFT) chip deal won't begin until 2026. Needham's N. Quinn Bolton trimmed his price target to $85 from $100, citing valuation compression. He maintained a Buy rating, noting Marvell has addressed next-generation XPU concerns and that its Microsoft and Amazon (NASDAQ:AMZN) agreements remain intact. The company has secured 3 nm wafer and packaging capacity for production in calendar 2026 and expects custom XPU revenue to grow in fiscal 2026 and beyond. Morgan Stanley's Joseph Moore said his team may have overestimated pricing or volumes for Marvell's custom AI business with Amazon's Trainium processors, but added other segments are performing well and management remains confident in its AI roadmap. Shares of peers Broadcom (NASDAQ:AVGO) and Nvidia (NASDAQ:NVDA) also inched lower. This article first appeared on GuruFocus.
Yahoo
5 hours ago
- Business
- Yahoo
Shoe Carnival Stockpiles Inventory To Dodge Tariffs, Ramps Up Rebannering
Shoe Carnival, Inc. (NASDAQ:SCVL) on Friday reported first-quarter adjusted earnings per share of 49 cents, beating the analyst consensus estimate of 30 cents. On a GAAP basis, Shoe Carnival registered net income per diluted share of 34 cents, compared with 63 cents a year ago. The company estimates that first-quarter 2025 EPS was reduced by about 15 cents due to costs tied to its rebanner strategy, including store closures, construction, grand reopening delays, and customer acquisition company said Shoe Station has been the fastest-growing retailer in its sector over the past two years, while Shoe Carnival and the broader family footwear industry have declined. Shoe Carnival aims to leverage this success by expanding Shoe Station from a Southeast leader to a national presence. They tested rebannering 10 stores in FY2024 and converted 24 more in Q1 2025. Shoe Carnival is now accelerating this strategy, planning to have approximately 120 stores (28% of its fleet) operating as Shoe Station by the end of FY2025, with 51 additional conversions scheduled throughout the remainder of the year, including expansion into new markets. Quarterly sales of $277.71 million (down 7.5% year over year) missed the Street view of $323.64 million. Comparable stores net sales declined 8.1 percent, of which the company estimates approximately 1 percent was due to lost sales as impacted by the rebanner strategy. Shoe Carnival's President and CEO, Mark Worden, reported strong first-quarter results, with profits exceeding expectations by about 10% despite a challenging economic and retail climate. He highlighted the success of the Shoe Station growth strategy, which is delivering industry-leading sales growth and margin improvements across various markets, outperforming both Shoe Carnival and general industry trends. Due to this success, the company is accelerating its 'rebanner initiative,' now aiming for Shoe Station to represent over 80% of its store fleet by March 2027, a significant increase from the previous 51% target, he said. This expansion is being funded by the company's strong financial position, characterized by growing cash reserves and no debt, marking a pivotal shift from a traditional family footwear retailer to a premium, brand-focused national leader, Worden said. The first quarter 2025 gross profit margin was 34.5%, down from 35.6% in the first quarter of 2024. Shoe Carnival said it invested $16.8 million in additional merchandise inventory compared to the year-ago period. Additional inventory purchases were made in the quarter before the tariff increases were announced on April 2. As of May 3, the company had 429 stores, with 334 Shoe Carnival stores, 67 Shoe Station stores, and 28 Rogan's stores. The Shoe Station store count has more than doubled since the end of the first quarter 2024. Going ahead, the company said it is accelerating its rebanner strategy and now expects approximately 120 stores, or 28% of the store fleet, to operate as a Shoe Station store by the end of Fiscal 2025. Shoe Carnival reaffirmed its FY2025 GAAP EPS outlook of $1.60 to $2.10, compared to the $1.94 estimate. The company also maintained its FY2025 sales guidance of $1.15 billion to $1.23 billion, compared with the $1.19 billion consensus. Price Action: SCVL shares are trading higher by 4.77% to $19.32 at last check Friday. Read Next:Photo by JHVEPhoto via Shutterstock UNLOCKED: 5 NEW TRADES EVERY WEEK. Click now to get top trade ideas daily, plus unlimited access to cutting-edge tools and strategies to gain an edge in the markets. Get the latest stock analysis from Benzinga? SHOE CARNIVAL (SCVL): Free Stock Analysis Report This article Shoe Carnival Stockpiles Inventory To Dodge Tariffs, Ramps Up Rebannering originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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5 hours ago
- Business
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Marvell Shares Tumble Amid Concerns Over Next-Gen AI Ramp
May 30 - Shares of Marvell Technology (NASDAQ:MRVL) slid 4% in premarket trading Friday after the company posted first-quarter results and updated its guidance. The specialty semiconductor firm reported a GAAP gross margin of 50.3% and a non-GAAP gross margin of 59.8%. GAAP diluted EPS came in at $0.20, with non-GAAP diluted EPS of $0.62. Cash flow from operations was $332.9 million, bolstered by its positioning in the custom AI infrastructure market, which may drive further growth. Warning! GuruFocus has detected 4 Warning Signs with MRVL. Bank of America analyst Vivek Arya, who rates the stock Buy with a $72 target, said confirmation of Marvell's pipeline ahead of its June 17 AI Investor Event could boost confidence. However, limited earnings revisions are likely to keep the shares in check near term, as the Microsoft (NASDAQ:MSFT) chip deal won't begin until 2026. Needham's N. Quinn Bolton trimmed his price target to $85 from $100, citing valuation compression. He maintained a Buy rating, noting Marvell has addressed next-generation XPU concerns and that its Microsoft and Amazon (NASDAQ:AMZN) agreements remain intact. The company has secured 3 nm wafer and packaging capacity for production in calendar 2026 and expects custom XPU revenue to grow in fiscal 2026 and beyond. Morgan Stanley's Joseph Moore said his team may have overestimated pricing or volumes for Marvell's custom AI business with Amazon's Trainium processors, but added other segments are performing well and management remains confident in its AI roadmap. Shares of peers Broadcom (NASDAQ:AVGO) and Nvidia (NASDAQ:NVDA) also inched lower. This article first appeared on GuruFocus. Sign in to access your portfolio
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8 hours ago
- Business
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1 Super Stock Up 41% in the Past 7 Weeks: Should You Buy It in June and Hold Forever?
Despite catering to a macro-sensitive customer base, this cloud-based software and service provider posted 24% revenue growth in Q1. Competitive advantages stem from customer switching costs, as well as the ability to collect invaluable data. Shares trade at a P/S ratio above 5, highlighting the market's enthusiasm toward the business. 10 stocks we like better than Toast › After a troubling start to the year, the market has bounced back remarkably. Some companies in particular have benefited tremendously from the renewed sense of optimism. As of May 27, this growth stock has soared 41% in the past seven weeks. At the same time, the Nasdaq Composite index has climbed 25%. There are undoubtedly a few reasons for investors to get excited about this business. Should you buy shares in June and hold them forever? Some companies are struggling amid the uncertain economic environment, but Toast (NYSE: TOST) keeps putting up strong growth, with revenue jumping 24.4% in Q1 (ended March 31) on a year-over-year basis. The cloud-based and restaurant-focused hardware and software provider added 6,000 net new customers during the quarter. Toast's growth thus far, especially the momentum that's carried over into 2025, is certainly impressive. It points to robust demand for its products and services and perhaps the peace of mind it gives customers. That's encouraging. However, a business like Toast, which caters to an economically sensitive part of the economy, the restaurant sector, can be exposed to macro forces beyond its control. Restaurants open and close all the time. In a possible recession, which experts believe is still on the table this year, it's possible that some of Toast's customers see falling demand or even go out of business. This will hurt sales. On a positive note, this company is profitable on a generally accepted accounting principles (GAAP) basis. Net income totaled $56 million in Q1, a major reversal from an $83 million net loss in the year-ago period. Consensus analyst estimates call for earnings per share to increase at a compound annual rate of 42.4% between 2024 and 2027. It's best to take these predictions with a grain of salt, but that outlook can add to the bullishness. Toast's success deserves credit. But investors need to understand the industry backdrop. There are some formidable competitors, like Block's Square, Fiserv's Clover, and Lightspeed. Since 20% of new customers come from referrals, Toast is doing a great job. However, these competitors have the financial resources and tech know-how to make the next five years more difficult for Toast than the last five. There is notable competition that should keep Toast's management team and shareholders on alert. However, this business has carved out a successful position in the industry, as showcased by having 140,000 restaurant locations as its customer base. Even more impressive, it was announced recently that Toast signed Applebee's, owned by Dine Brands Global, as a customer -- the company's largest deal ever. Toast also added Topgolf locations of Topgolf Callaway Brands to its customer roster. Toast's scale likely means the company has now developed an economic moat. Software enterprises like this one typically benefit from switching costs as their customers sign up for, train employees on, and become dependent on the products and services. And because Toast also processes payments, it's able to collect proprietary data that can be used to provide invaluable insights to customers. Since the start of 2024, shares of Toast have soared 136%. There's a lot of bullish momentum among the investment community, which makes sense, given the fundamental strength of the underlying business. The shares, therefore, aren't that cheap. As of May 27, they trade at a price-to-sales ratio of 5.1. That's close to the most expensive they've been in the past three years. This adds downside risk should the business report financial results that disappoint Wall Street. However, investors who remain convinced that Toast will be a massive winner should consider dollar-cost-averaging into the stock starting in June. It's impossible to say that a company can be a forever holding before buying shares, so it's critical to continue monitoring financial performance over the long term. Before you buy stock in Toast, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Toast wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $651,761!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $826,263!* Now, it's worth noting Stock Advisor's total average return is 978% — a market-crushing outperformance compared to 170% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Block and Toast. The Motley Fool recommends Topgolf Callaway Brands. The Motley Fool has a disclosure policy. 1 Super Stock Up 41% in the Past 7 Weeks: Should You Buy It in June and Hold Forever? was originally published by The Motley Fool
Yahoo
12 hours ago
- Business
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Generative AI Sales May Soar 600% by 2028: 2 Brilliant AI Stocks to Buy Now (Hint: Not Palantir)
Morgan Stanley estimates generative artificial intelligence (AI) revenue across software and internet companies will increase more than 600% between 2025 and 2028. AppLovin specializes in video game and e-commerce advertising, and the company has differentiated itself with a superior AI-powered targeting engine. CoreWeave is a leading provider of cloud AI infrastructure services, and the company just reported 420% sales growth in the first quarter. 10 stocks we like better than AppLovin › Following the introduction of ChatGPT, billionaire Bill Gates wrote, "Artificial intelligence (AI) is as revolutionary as mobile phones and the internet." That implies substantial wealth creation in the coming years. Morgan Stanley estimates generative AI revenue across software and internet companies will increase more than 600% to approach $1.1 trillion by 2028. Palantir Technologies probably comes to mind for many readers, given how well the stock has performed. But AppLovin (NASDAQ: APP) and CoreWeave (NASDAQ: CRWV) are also well positioned to benefit. AppLovin designs adtech software that lets developers market and monetize their applications across mobile and connected TV campaigns. Traditionally, most advertising on its platform has focused on video games, but the company is expanding on its primary market with a new e-commerce advertising product. AppLovin has differentiated itself with artificial intelligence (AI). Morgan Stanley says the company has a "best-in-class" recommendation engine called Axon that targets advertising campaigns with sophisticated machine learning models. Additionally, its in-house creative agency, SparkLabs, use generative AI to create personalized ad content for clients. AppLovin reported fantastic first-quarter financial results. Total revenue increased 40% to $1.4 billion, as strong sales growth in the advertising segment offset a decline in the mobile games segment. Meanwhile, generally accepted accounting principles (GAAP) earnings climbed 149% to $1.67 per diluted share. And management guided for 69% advertising sales growth in the second quarter. Importantly, AppLovin recently sold its mobile games portfolio for $800 million. That decision benefits the company in two ways. First, sales in that segment have been declining, so the divestiture eliminates the weakest part of the business. Second, it allows AppLovin to focus on its core adtech software business, including its nascent e-commerce product. Wall Street estimates AppLovin's earnings will increase at 43% annually through 2026. That makes the current valuation of 64 times earnings look fair, especially when the company beat the consensus estimate by an average of 33% in the last six quarters. Risk-tolerant investors should feel comfortable buying a small position today. CoreWeave provides cloud infrastructure and software services. The company runs the leading GPU cloud, meaning data center infrastructure that's purpose-built to support artificial intelligence (AI) applications and other complex workloads that need to be accelerated with graphics processing units (GPUs). The company uses Nvidia GPUs exclusively. CoreWeave has differentiated itself in a few important ways. First, it has regularly achieved strong results at the MLPerf benchmarks, objective tests that evaluate the performance of AI systems across training and inference workloads. Second, the company is often among the first cloud providers to deploy new Nvidia technology due to its close relationship with the chipmaker. "CoreWeave is built to move faster -- and time and time again, we've proven it by being first to operationalize the most advanced systems at scale," CEO Michael Intrator said earlier this year after the company launched Nvidia GB200 NVL72 systems ahead of its peers. That edge, coupled with expertise in managing large GPU clusters, explains why CoreWeave is growing like wildfire. First-quarter revenue soared 420% to $981 million, and adjusted operating income (which excludes stock-based compensation and interest payments) rose 550% to $162 million. However, CoreWeave has $7.8 billion in long-term debt and lease obligations. Interest on that debt consumed about one-quarter of revenue, which led the company to report a non-GAAP loss of $150 million. CoreWeave is not yet profitable, so it's difficult to value the stock. Having said that, the current price-to-sales ratio is 21. That is neither cheap nor outrageously expensive for a company that just reported triple-digit sales growth, especially when that sales growth came with a 73% gross margin. Patient investors comfortable with volatility should buy a small position. Before you buy stock in AppLovin, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and AppLovin wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $651,761!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $826,263!* Now, it's worth noting Stock Advisor's total average return is 978% — a market-crushing outperformance compared to 170% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Trevor Jennewine has positions in Nvidia and Palantir Technologies. The Motley Fool has positions in and recommends AppLovin, Nvidia, and Palantir Technologies. The Motley Fool has a disclosure policy. Generative AI Sales May Soar 600% by 2028: 2 Brilliant AI Stocks to Buy Now (Hint: Not Palantir) was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
